Creating Support Ecosystems for India's Healthcare Startups
Prime Minister Narendra Modi has pledged to increase India's public health spending to 2.5 per cent of the GDP by 2025
Emerging healthcare startups have in recent years used innovation of thought and services to help fill a series of voids in the Indian healthcare system. While digital applications have changed the dynamics of consultation by bringing thousands of doctors in direct touch with patients, startups like have served to bring hospital care at the doorsteps of chronically ill patients. Yet others are contributing to improving healthcare outcomes by redefining service delivery, reducing diagnostic time and cutting healthcare costs. Scores of potentially game-changing ideas are being discussed by budding entrepreneurs across the country. Yet, not all of these ideas will see the light of the day; others will face several obstacles in their quest to take off.
This brings us to the important question of what needs to be done to provide a wholesome environment of support to startups in India, particularly in the healthcare domain. India's healthcare sector is bedevilled by a series of problems including low doctor-patient ratio, lack of accessibility to tertiary care, high costs of treatment and low insurance coverage. While Prime Minister Narendra Modi has pledged to increase India's public health spending to 2.5 per cent of the GDP by 2025, unleashing the power of transformative entrepreneurial ideas is also critical to fill the huge gaps in healthcare delivery.
In every gap and every need there lies an opportunity for a new venture. Our healthcare system needs revolutionary ideas that can make a difference to the last man. Creating an ecosystem that rewards and supports entrepreneurship and boosts the growth of new innovative ideas is a key element to catalyze this trend.
Incubation Centres at Academic Institutes
If we look at the history of some groundbreaking entities today, we will find that many of them were conceived by students as experimental projects at college. Facebook comes across as the most famous example. In India as well, a number of students at IITs and IIMs have conceived and incubated their startup ideas while studying. This puts the focus on academic institutions as a ripe ground for catching and nurturing potentially path-breaking business ideas in the healthcare domain. Access to connections with industry and market know-how is critical for ventures to take off and scale up. Fresh out of college, students are often not in a position to take entrepreneurial risks. Others have no understanding of how to take off a business. If provided with the right mentorship, guidance and an interface with experienced industry leaders, they can gain enough confidence to start their entrepreneurial ventures. Young ventures in healthcare also need ecosystem knowledge as they enter already crowded markets and attempt to seek partners. The government, private organizations, hospitals as well as industry leaders must come together to lay the ground for incubation centres at different academic institutions where innovative ideas are discussed, debated, incubated and funded if found viable. It must be necessary for every management institution to introduce the concept of incubation. In fact, institutions must also partner successful alumni who can mentor students and help them find funding.
Funding and Other Incentives
Rightly realizing the importance of entrepreneurship in changing the face of Indian society, the government had in January 2016 launched an ambitious Startup India scheme to support the growth of startups by providing incubation, funding and tax exemptions among other benefits. However, a recent survey has found that around 82 per cent of the startups in the country have reported not receiving any benefit under the scheme. Even as banks remain wary of lending without collaterals, VC funds have in recent years shown a tendency to fund lesser number of startups and invest greater amounts in more valuable assets. Interestingly, between 2014 and 2016, almost 1000 startups are believed to have closed down due to lack of funding.
It is imperative therefore to create avenues to fund healthcare startups that hold a promise to bring about a difference in the lives of people. The government must step forward and launch partnerships with private entities and banks to create funds for startups that have the potential to improve healthcare delivery. Innovation and entrepreneurship have the potential to transform healthcare delivery in under-served rural areas and help fill some of the most glaring voids in Indian healthcare. Health startups can become critical facilitators in helping improve the provision of health care services to about 70% of the rural population. Digital startups that harness the advancements in mobile and Internet technology can make up for the limited physical facilities. Supporting social entrepreneurs working in the field of healthcare and sanitation must be the focus of such a fund. The government must also consider giving tax breaks to startups that have the potential to improve healthcare outcomes.
At the same time, cutting red tape, improving the ease of doing business is a necessary element for boosting the ecosystem for startups anywhere.
Nurturing Human Resource
India's demographic dividend seems conducive to Startups, with a large young population and millions of graduates being produced every year. However, the shortage of a skilled workforce continues to remain a major challenge facing startups that are hungry for a human resource but do not have the wherewithal to provide skill training. A survey conducted by Monster India found that 66 per cent of fresh graduated felt underprepared for their first job. Shortage of skilled workforce bedevils almost every segment of the industry in India. It is important therefore to simultaneously create programs that convert theoretically sound students into job-ready human resources. This calls for close cooperation between academia and the industry to provide students with greater exposure to practical training right from their student days.
It is also important to nurture in students a desire and will to create a positive difference to society. Socially conscionable students can become the bedrock of startups working in healthcare and social sectors.